Emboldened Iraqi Kurds may find momentum for greater gains on the back of ISIL's rapid expansion in Iraq.

If the Kurds of northern Iraq have so far felt insulated from the civil and armed strife tearing the rest of the country apart, this week's fall of Mosul to an al-Qaeda splinter group will likely be a wake-up call.

The Islamic State of Iraq and the Levant's (ISIL) successful offensive, despite being outnumbered by the Iraqi army, may have less to do with the fighters' prowess and strength, than with the army's unwillingness to continue fighting the battles of beleaguered Prime Minister Nouri al-Maliki.

According to Mosul's governor, Athil al-Nujaifi, the army "quickly retreated against a simple force such as ISIL, leaving all their tanks and heavy artillery for the militants".

The capture of Mosul, just an hour's drive from the Kurdish regional capital, Erbil, has led to fears that ISIL may soon threaten the security of the Kurdish region, and more significantly, make advances on the oil-rich city of Kirkuk.

Often described as the "Kurdish Jerusalem", Kirkuk is claimed by Erbil as part of a conceptual "greater Kurdistan". But its ownership is also contested by Arabs and Turkmen.

On June 11, Baghdad announced that it would be aided in the battle against ISIL by Kurdish Peshmerga forces. Divided by squabbles over budget and oil revenues but united by the threat of further ISIL encroachment, the Kurdistan Regional Government did not immediately acquiesce to Maliki's request for reinforcements, but Peshmerga forces have reportedly been deployed south of Kirkuk - albeit Kurdish officials say they've been there all along.

There has been speculation over concessions that may or may not have been made by Baghdad to secure Kurdish assistance. The KRG has denied all such rumours as "fabrication".

Still, for some Iraqi Kurds, this may just be the gambit they were waiting for.

The significance of the takeover of Iraq's second largest city cannot be underplayed. Less than 160kms from Syria and close to Iraq's western desert, Mosul is strategically vital for funding the efforts of al-Qaeda in Iraq and ISIL. It is also an ISIL "cash cow", with local businesses reportedly paying monthly protection money to the militant group.

For Iraqi Kurds, however, Mosul has served as a buffer between the relatively prosperous, secure enclave known as Iraq's Kurdistan Region, and the remainder of the country.

Ironically, ISIL's takeover of Mosul may now present a "golden opportunity" to advance long term Kurdish objectives, according to some Iraqi Kurdish politicians. With Baghdad's request for military backup in a campaign the Iraqi army alone is almost sure to lose, Erbil now has the green light to send its troops into disputed territories and stake its claim.

Shoresh Haji, a Kurdish member of the Iraqi Parliament, said: "I hope that the Kurdish leadership will not miss this golden opportunity to bring Kurdish lands in the disputed territories back under Kurdish control. It is a very sad situation for Mosul, but at the same time, history has presented us with only one or two other moments at which we could regain our territory and this is an opportunity we cannot ignore."

He added: "We must regain the territory and protect its inhabitants from attack by the terrorists. This time we must stay on the Kurdish land and then negotiate with Baghdad, not withdraw and then negotiate."

Cengiz Aktar, a Turkish political analyst, says it is likely the Kurds will attempt to capitalise on the chaos to stake their claim on Kirkuk, but it is unrealistic to expect Kurdish Peshmerga to achieve a quick and easy victory over ISIL fighters. He says the contest over Kirkuk - and whatever plans there were for the city by those bickering over it - have "collapsed with ISIL as a new actor".

"[KRG President Massoud] Barzani and the Iraqi Kurds are Turkey's allies. So all this makes Ankara very nervous," he said.

For over a decade, Turkey has enjoyed privileged trade ties with Iraqi Kurdistan; Turkish contractors dominate the booming construction scene and Turkish goods litter the Iraqi Kurdish markets. But more significantly, last week, Turkey and Iraqi Kurds announced the sale of more than one million barrels of Kurdish oil to world markets via Turkey's Ceyhan port, despite Baghdad’s protests that the sale was "unauthorised".

Unsurprisingly, the fall of Mosul has raised alarms in Ankara; the Turkish press is rife with fears that the involvement of Peshmerga troops would embolden Kurds to further their secessionist ambitions, or worse yet, that the PKK may be invited to join the fight as a counterweight to ISIL.

Others believe that Turkey's alliance with Iraqi Kurds would prompt Ankara to enter the fight in their aid, which may have been a factor behind the attack on the Turkish consulate in Mosul. The 49 consulate staff are now ISIL hostages, and may serve as bargaining chips in the greater game playing out in the region. (Thirty-one Turkish truck drivers were captured earlier and released on June 12.)

Will Ankara step in to assist its allies, the Iraqi Kurds, in pushing ISIL fighters back but risk shooting themselves in the foot in the long term, or will it desist from taking a position for fear of losing its hand in Syria?

Aktar says it is hard to speculate what course of action Turkey will take at this early stage, and much depends on the US reaction to this latest turn of events.

"What we know for sure is that Turkey pampered these [al-Qaeda offshoots] until recently to use them against Syrian Kurds. It only declared them as 'terrorist organisations' very recently," Aktar says. "We also know that Turkey is eager to see Kurdish oil flowing without Baghdad's interference."

Baghdad has been further weakened by this episode, and the KRG is in a better position given its stronger forces and Baghdad needing KRG’s assistance against ISIL.

- Shwan Zulal, political risk consultant

There have also been some concerns that ISIL's rapid gains in Mosul, Tikrit and Tuz Khourmatu, as well as advancement on Kirkuk, pose a threat to oil interests.

On June 11, ISIL fighters advanced into the oil refinery town of Baiji, setting the courthouse and a police station on fire.

Shwan Zulal, an oil and political risk consultant with Carduchi Consulting, doubts there will be a significant impact on the region in the immediate short term.

"At the moment, there will be little impact because they are not close to the producing field, but oil field blocks close to the disputed territories may be affected in terms of security. Production is unlikely to be affected but operation in areas close to the border may see heightened security. So far, there is no indication that ISIL are intending or willing to take on the KRG," he said.

The question on the minds of most Kurds now is how the KRG will be able to use the leverage they now feel they possess as a result of a "weakened" Baghdad.

"Baghdad has been further weakened by this episode, and the KRG is in a better position given its stronger forces and Baghdad needing KRG’s assistance against ISIL," said Zulal.

The Kurdish role in dealing with the ensuing humanitarian crisis will also be crucial. The mass exodus of civilians from Mosul has aggravated the refugee situation with which the Kurdish region has been grappling since the outbreak of the Syrian civil war.

An estimated 500,000 people have fled Mosul since ISIL took control of the city. According to Eliana Nabaa, spokesperson for the United Nations Assistance Mission for Iraq (UNAMI), the situation is still "quite fluid".

The hundreds of thousands of Mosul refugees add to the more than 200,000 Syrians who are already residing in 13 camps across the Kurdistan region and western Anbar province.

"The current estimates put the number of people who have fled Mosul at approximately 500,000. Between 200,000 to 300,000 are in or heading towards the KRG, while the others moved to safer places inside the Nineveh province or elsewhere," she said.

General Hassan Nuri, head of the Kurdish regional security organisation (Asayish) in Sulaymaniyah, said the KRG has decided to house the Mosul refugees in the schools.

"It will allow us to give them shelter with water and electricity. Schools are out for the summer so it won't disrupt education," he said.

Many Iraqi Kurds, off the record, cite the absence of the pragmatic Kurdish President Jalal Talabani as the reason for the deterioration of relations between Iraq's divided communities. They lament the lack of a suitable replacement for the Iraqi Kurdish leader, taken ill in December 2012, to troubleshoot and quell tensions.

However, it is too early to tell whether ISIL's gains across Iraq mark a turning point in the power struggle in Iraq, or just another development in the ongoing rivalry between the country's Sunnis, Shia Muslims and Kurds.

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